Law Test 3 Challenging Questions Part 2

Billy wants to borrow $10,000 to start a male belly dancing business. Creditors are not anxious to lend him the funds. Billy convinces Gary to back-up the credit he gets from a bank. On the loan, Billy is: a. the principal b. the grantor c. the sorrier d. the surety e. the guarantor

A

If a country has adopted the United Nations' Convention on the Recognition and Enforcement of Foreign Arbitrable Awards then: a. its courts are bound to recognize and enforce arbitration decisions that have followed proper procedure b. its courts are not bound to recognize and enforce arbitration decisions that have followed proper procedure c. its courts are unlikely to recognize and enforce arbitration decisions d. its courts will charge a nominal fee to hear cases e. damage awards from cases tried in its courts cannot exceed $10,000

A

Northwest is a micro-brewery. It orders bottles from M that must have crests inscribed on the bottles. To be sure the bottles meet specifications, Northwest hires someone to check them as they were produced at M. With respect to the expenses of hiring the inspector: a. Northwest pays the expenses but may recover them if the bottles do not conform b. Northwest must pay the expenses under any circumstances c. M must pay the expenses because the bottles are a unique item d. M must pay the expenses since Northwest is not liable for any expenses until the bottles are accepted e. none of the other choices

A

The general rule regarding acceptance is: a. a reasonable acceptance is valid when sent to the offeror b. all acceptances are valid and binding on offerors c. acceptances are valid when received by offerors d. an acceptance will be valid only if mailed to offeror e. an acceptance is a void unless received by offeror within forty-eight hours of the offer

A

A commercial instrument where one party has a legal obligation to pay another party a certain sum of money and involves a maker and a payee only is called: a. a check b. a note c. a debit d. a draft e. a certificate of deposit

B

In Certified Fire Protection v. Precision Construction, Precision accepted a winning bid from Certified for it to install a fire suppression sprinkler system. Later the two parties got into a fight over some details in the contract, which was never signed. The courts held that the contract was: a. a binding contract had been formed, even though only one of the parties had signed the agreement b. a binding contract was never formed because the parties did not agree on some major terms needed for an agreement c. there was no binding contract because Certified failed to accept in the manner prescribed in the contract that was offered d. there was no binding contract because Precision failed to make the initial payment needed to bind Certified e. there was no binding contract because the document "shocked the conscience of the court"

B

Suppose that Gena pledges her 1/2 acre piece of property to secure her loan with First Fidelity. After Gena defaults on her loan, First Fidelity may obtain: a. a mechanic's lien on the property b. a judgment lien on the property c. a possessory lien on the property d. a default lien on the property e. an executory lien on the property

B

Under the the seller must tender the quality, quantity, and delivery method exactly as specified in the contract or the buyer has the right to reject the goods and rescind the contract. a. fine tender rule b. perfect tender rule c. ultimate tender rule d. common law tender rule e. exact tender rule

B

Which of the following are not required to be in a certificate of limited partnership: a. the type or character of the business b. the business positions to be held by each partner c. the proportion of profits to be earned by each partner d. the business positions to be held by each partner and the proportion of profits to be earned by each partner e. the business positions to be held by each partner and the proportion of profits to be earned by each partner and the proportion of profits to be earned by each partner

B

You pay $200 for the right to be the only buyer a seller will deal with for ten days for a piece of property that is for sale for $250,000. This is: a. called a terminable contract b. called an option contract c. called a revocable contract d. not a contract because the consideration is not relevant to the value of the property e. none of the other choices

B

A buyer and a seller would like to enter into a contract for the sale of goods. In his offer the buyer does not specify a price. The seller agrees with the arrangement. a. under Article 2 there is a contract if the parties have done business before b. under the common law of contracts, but not the UCC, there is a contract because the parties intended to enter into a binding agreement even in the absence of the price term c. there is a contract under Article 2 because it allows the parties to enter into a contract even though the price is to be determined later d. there is no contract under Article 2 because "some of the offer's major terms were omitted or were simply left open for determination later" e. there can be no contract under Article 2 or the common law when price is missing

C

Each month Gena is supposed to pay a set amount of money to Fidelity in repayment of her loan. This may be described as what type of credit account? a. a full-collateral account b. an open account c. an installment account d. a retainer account e. a signatory account

C

In general, limited partners lose their limited liability status by: a. being a limited partner in another partnership b. denying association with the partnership c. participating in managerial decisions in the partnership d. being a partner in another partnership or by participating in managerial decisions in the partnership e. being a partner in another partnership or by participating in managerial decisions in the partnership or by denying association with the partnership

C

Language that attempts to dismiss an express warranty is warranty. a. effective b. effective in some states, but not others c. not effective d. allowed under certain circumstances e. illegal and immoral

C

Limited partners are similar to corporate shareholders in that: a. both have unlimited liability b. there is no liability for either c. both are liable to the extent of their investment d. there must be one general partner e. none of the other choices

C

Negotiable instruments under the UCC do not include: a. notes b. certificates of deposit c. cash d. promissory notes e. all of the other choices are negotiable instruments subject to UCC

C

Roberta says "Susan, I will sell you my car for $5,000." Susan says, "I'll give you $4,500." Roberta says "No." Later Susan calls Roberta and says, "I have $5,000 and want the car." Roberta: a. must sell the car for $5,000, since the offer was accepted b. must sell the car for $5,000 since the offer was accepted in a timely fashion c. does not have to sell the car due to the counteroffer, which is a rejection d. does not have to sell the car because her offer was not accepted in a timely fashion e. none of the other choices

C

Tender is: a. a proper initiation of a contract b. failure to provide a sufficient offer of performance under a contract c. a valid and sufficient offer of performance under a contract d. a type of contract e. a contact that allows the offeree to terminate the contract at any point

C

The Restatement (2d) of Contracts defines a(n) as "the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it." a. proposal b. suggestion c. offer d. bid e. none of the other choices are correct

C

Tiny borrows $20,000 from First Bank. Mike is the surety on the loan. Tiny defaults and First Bank requires Mike to pay the balance of the loan. In this case, Mike may sue: a. First for violating its guarantor obligations b. First for defrauding him c. Tiny to reimburse or exonerate him d. Tiny to enslave himself to Mike e. First to exonerate him

C

Twenty years after you take this class you are successful and wealthy. Knowing that this class was the key to your success, you look up your old professor and send a letter saying, "Because you helped me so much, I am going to send you a check for $100,000." Later you come to your senses and do not send the check. Your old professor sues you for the money: a. you have to pay; there is a valid contract b. you do not have to pay; the professor did not send a timely letter of acceptance c. you do not have to pay; there is a lack of consideration d. you do not have to pay; promissory estoppel applies e. you do not have to pay; you were legally insane

C

Under Article 3 of the UCC, a note is: a. an unconditional written order to pay that involves three parties: drawer, drawee, payee; the drawee may be a bank, person, or business; payment may be set at some future time b. an unconditional written order to pay that involves three parties: drawer, drawee, and payee; the drawee must be a bank; payment must be "on demand" c. a promise by one party to pay a certain sum of money to another party; two parties are involved: the maker and the payee; payment may be set at a date in the future d. an acknowledgment by a bank that it has received money from a customer with a promise from the bank that it will repay the money received either at a specified date or upon demand; two parties are involved: a maker and a payee e. none of the other choices

C

Under the CISG, in the event of breach, the parties: a. may immediately move for damage remedies b. may move for damages after a 30-day rectification period c. must be given a notice of breach and a chance to cure the problem d. may not sue for damages, only cease dealings e. none of the other choices

C

Under the UCC, a buyer's damages are to put the buyer in as good a position as if the seller had performed the contract. The buyer is allowed to seek incidental damages for recovery of those costs resulting from the breach. Incidental damages include: a. foreseeable, although not necessarily foreseen, damages that result from the seller's breach b. injuries to people or property that are (proximately) caused by the seller's breach of any warranty c. reasonable costs of inspecting, transporting, and caring for goods while in her possession d. all of the other choices e. none of the other choices

C

Unless the limited partnership agreement holds otherwise, when a limited partnership is dissolved the limited partners receive their share of the profits and their capital contributions: a. after the general partners get theirs b. after the general partners, but before the creditors c. before general partners receive anything d. before creditors receive anything e. none of the other choices are correct

C

Which of the following statement(s) is (are) true? a. a partnership may consist entirely of limited partners b. a limited partner may exercise control over the business in proportion to his interest in it c. a limited partnership must have at least one general partner d. all of the other specific choices are true e. none of the other choices

C

95. July 10, 2012, the following ad appeared in the newspaper: "Male Collie, age 2, lost near Highway 85 and Laurens Road, $250 reward. Call 654-1909." In July of 2014, someone returns the dog. The owner: a. must pay the reward b. must pay the reward unless a cancellation notice regarding the reward was published c. does not have to pay the reward unless the person can show that they saw the ad d. does not have to pay the reward⎯too much time has passed for there to be a contract e. does not have to pay the reward because the dog is dirty

D

Acceptance of an offer must be unequivocal or . a. final b. written c. unwritten d. definite e. equivocal

D

Assume that Gena pledges to Fidelity that if she is unable to meet her monthly repayment obligations the bank may take her pasta machines. They may be best described as: a. principal b. equity c. leveraged equity d. collateral e. a guarantor

D

Assuming that Gena pledges not only her pasta makers, but also her 1/2 acre piece of property in Montclair, NJ. Once she defaults on her loan payments to First Fidelity the bank may: a. start judicial proceedings against her b. seize all of her property to settle the debt c. seize her non-exempt property to settle the debt d. start judicial proceedings against her and seize her non-exempt property to settle the debt e. the bank cannot do anything until it files its claim with the governor of the state

D

If Jeanette decides to go into business with her friend Maia, Richard suggests that the two establish a partnership to carry on their business. If they do, this means both: a. are co-owners of the business b. share control over the profits of the business c. have limited liability for the debts of the business d. are co-owners of the business and share control over the profits of the business e. are co-owners of the business and share control over the profits of the business and have limited liability for the debts of the business

D

If Scott makes a nonbinding promise to Lee and then fails to fulfill it: a. Lee can expect contract law to provide a remedy b. Lee can expect contract law to provide a remedy if he lives East of the Mississippi c. Lee can expect that he will have to go to the Supreme Court for a remedy d. Lee cannot expect contract law to provide a remedy e. Lee is now legally allowed to force Scott to fulfill his promise

D

The (higher) price paid by a buyer for substitute goods in the event of a breach by a seller is called: a. consequential damages b. incidental damages c. expectancy damages d. cover e. none of the other choices

D

Which of the following is a decision that would most likely require the consent of all partners: a. changing the nature of the partnership's business b. admitting new partners c. selling the business d. all of the other specific choices are correct e. none of the other specific choices are correct

D

Which of the following may be specified by the franchisor: a. requirements regarding record keeping b. requirements regarding operating hours c. requirements regarding advertising d. all of the other specific choices are correct e. none of the other specific choices are correct

D

Commercial sales contracts that use the CISG: a. must litigate disputes in the country of the seller b. must litigate disputes in the country of the buyer c. must litigate disputes in a neutral nation that has signed the CISG d. must take disputes to the U.N. Commission on Foreign Awards e. usually go to arbitration

E

Refer to Fact Pattern 12-1. When Fidelity was deciding whether or not to lend Gena money, which of the following resources could it have possibly used? a. a pasta maker's trade association, if Gena was a member b. Gena's financial statements c. records of her transactions with other banks d. reports from credit agencies e. any or all of these

E

Uncle Jim tells his niece as she goes off to Creepy U. that if she maintains a 3.5 average that he will buy her a BMW convertible when she graduates. At graduation she has a 3.7 GPA and so she wants the BMW convertible. Uncle Jim says that he doesn't have to give her the BMW convertible because what she did was for her own good. Niece wants to sue Uncle Jim to get the BMW convertible. There probably is: a. no breach of contract because the benefit to Uncle Jim is trivial compared to the BMW convertible b. no breach of contract because what the niece did was a benefit for herself only c. no breach of contract because it would violate public policy d. no breach of contract; there was only a moral obligation e. a breach of a valid contract

E

Under the Uniform Limited Partnership Act, a written partnership agreement must include: a. the name of the business b. the type or character of the business c. the contributions of each partner d. the name of the business and the type or character of the business e. the name of the business and the type or character of the business and the contributions of each partner

E

Which of the following are usually included in a written partnership agreement: a. state law that applies to the partnership b. contributions of the partners c. limits on transfers of partnership shares d. how partnership shares will be valued e. all of the other specific choices are usually included

E